Inspired Entertainment (NASDAQ:INSE) Posts Earnings Results, Beats Expectations By $0.02 EPS

Key Points

• Inspired Entertainment beat EPS expectations, reporting $0.05 per share versus the $0.03 consensus, although quarterly revenue of $60.8 million fell short of the $64.04 million estimate.
• Management reaffirmed its 2026 adjusted EBITDA target of $112 million–$118 million as second-quarter adjusted EBITDA reached $27 million and margins expanded to 45%. However, a U.K. gaming-tax increase to 40% pressured interactive margins despite strong revenue growth.
• Retail Solutions remained a key growth driver, pushing EBITDA margins above 50%, while the company continued debt reduction and share buybacks. Analysts maintain a consensus “Hold” rating with an average price target of $15.

Inspired Entertainment (NASDAQ:INSE - Get Free Report) announced its quarterly earnings results on Wednesday. The company reported $0.05 EPS for the quarter, beating analysts' consensus estimates of $0.03 by $0.02, FiscalAI reports. The firm had revenue of $60.80 million for the quarter, compared to analyst estimates of $64.04 million.

Here are the key takeaways from Inspired Entertainment's conference call:

• Q2 results and outlook were on track: Revenue was $61 million and adjusted EBITDA was $27 million, with EBITDA margin expanding to 45%. Management reaffirmed its 2026 EBITDA target of $112 million–$118 million and expects pro forma free-cash-flow conversion above 25%.
• The U.K. Remote Gaming Duty increase from 21% to 40% significantly pressured interactive margins; despite 40% growth in U.K. gross gaming revenue, the higher tax caused interactive EBITDA growth to slow to approximately 13% year over year.
• Retail Solutions continued to improve: Cash-box growth, William Hill terminal redeployments, strong Vantage cabinet performance in Greece, and new Alberta placements drove retail EBITDA margins above 50%. Allwyn also ordered more than 2,000 replacement machines, with deliveries expected to begin in the fourth quarter.
• Management expects stronger second-half momentum across interactive and virtual sports, supported by seasonal game releases, custom development payments, market-share gains, Alberta launches, and broader BetMGM distribution. The company also plans to expand content production and enter iLottery next year.
• Capital allocation remains focused on both deleveraging and share repurchases: Inspired retired $23 million of debt and repurchased more than 700,000 shares year to date, while targeting leverage below 2.5 times by the end of 2027.

Inspired Entertainment Stock Performance

Shares of NASDAQ:INSE traded up $0.08 during trading on Wednesday, reaching $6.95. The stock had a trading volume of 132,141 shares, compared to its average volume of 118,888. The firm's fifty day moving average is $7.47 and its 200 day moving average is $7.60. Inspired Entertainment has a 52 week low of $6.10 and a 52 week high of $9.95. The stock has a market cap of $185.36 million, a price-to-earnings ratio of -11.39 and a beta of 1.22.

Hedge Funds Weigh In On Inspired Entertainment

Hedge funds and other institutional investors have recently bought and sold shares of the company. Kanen Wealth Management LLC grew its holdings in Inspired Entertainment by 50.9% during the 1st quarter. Kanen Wealth Management LLC now owns 2,006,017 shares of the company's stock worth $18,929,000 after acquiring an additional 676,988 shares during the period. Fuller & Thaler Asset Management Inc. acquired a new stake in shares of Inspired Entertainment during the 4th quarter worth approximately $309,000. Two Sigma Investments LP bought a new stake in shares of Inspired Entertainment in the 3rd quarter valued at $308,000. Rhumbline Advisers lifted its position in shares of Inspired Entertainment by 11.8% during the 2nd quarter. Rhumbline Advisers now owns 35,915 shares of the company's stock valued at $293,000 after acquiring an additional 3,794 shares during the period. Finally, Bank of America Corp DE lifted its position in shares of Inspired Entertainment by 122.6% during the 3rd quarter. Bank of America Corp DE now owns 30,121 shares of the company's stock valued at $283,000 after acquiring an additional 16,591 shares during the period. Institutional investors and hedge funds own 77.38% of the company's stock.

Analysts Set New Price Targets

INSE has been the topic of several recent research reports. Weiss Ratings reiterated a "sell (d)" rating on shares of Inspired Entertainment in a research report on Monday, June 8th. BWS Financial reaffirmed a "buy" rating and set a $20.00 price target on shares of Inspired Entertainment in a research note on Monday, May 11th. Finally, Zacks Research downgraded shares of Inspired Entertainment from a "strong-buy" rating to a "hold" rating in a research note on Tuesday, July 28th. One investment analyst has rated the stock with a Buy rating, two have assigned a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat, the stock presently has a consensus rating of "Hold" and an average price target of $15.00.

About Inspired Entertainment

Inspired Entertainment, Inc NASDAQ: INSE is a business-to-business provider of digital gaming content and technology solutions for the global gaming industry. The company's offerings include server-based gaming modules, virtual sports simulations, digital interactive content and mobile sports betting platforms. Inspired designs proprietary games and software that integrate with lotteries, casino operators, retail betting shops and online platforms, emphasizing reliable performance, rapid deployment and engaging player experiences.

At the core of Inspired's product suite is its Virtual Sports catalog, which simulates sporting events using advanced algorithms and randomized outcomes.

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